The US Dollar could get a lift if the Fed pushes back on market expectations for cuts – Commerzbank
Source Fxstreet
Michael Pfister, FX Analyst at Commerzbank, discusses how the Federal Reserve’s rate decision could impact the US Dollar (USD).
What does Powell surprise us with today?
For the Dollar, the key question may not be whether the first move comes in March or May. Rather, it is how quickly the Fed cuts rates after that.
If Fed Chair Jerome Powell is more decisive than last time in pushing back against the rather ambitious expectations for this year, then the Dollar should benefit again. However, given his surprising reversal in December, when he said that the Fed was not interested in market expectations, and the fact that only slightly more rate cuts have been priced in since then, I find it hard to imagine that this will happen. But after the December meeting, you have to realize that any surprise is possible. So perhaps the key question is: what does Powell surprise us with today?
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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